Boomin chief executive Michael Bruce wants government action to help save the housing market as the cost of living crisis grows.
Following yesterday’s base rate rise by the Bank of England, Bruce makes an unspecified plea for help.
He says: “The government needs to act to ensure that there is a healthy property market to stimulates the health of the wider economy. We cannot afford to allow inflation and interest rates working in tandem to slow the property market and reduce home mover confidence."
Bruce continues: “With recent figures showing inflation is at a 30 year high, a swift response from the Bank of England was only to be expected and there’s a good chance it’s not the last we’ll see this year.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “An immediate impact on housing activity at least is unlikely bearing in mind the number of homeowners on fixed-rate mortgages.
“Of more concern is the shock likely to be felt by aspiring first-time buyers who are so vital to the longer-term health of the market.
“Today’s uplift will probably be the first of a few and this future direction of travel for interest rates will inevitably compromise affordability for those who can least bear it, deter some from taking that first step on the ladder and dampen house price growth.”
And Lucian Cook, head of residential research at Savills, adds: “The rise will be a signal to homebuyers that rates will inevitably rise and that this may now happen earlier than anticipated.
“Whether or not the Bank of England now eases back on mortgage regulation is now a more pressing question for more highly leveraged buyers.
“The mortgage market remains very competitive and lender margins have tightened over the course of the pandemic. As such, we could see today’s rate rise passed on to borrowers in full.
“We stand by our forecasts of average 3.5 per cent house price growth across the UK this year, likely weighted towards the first half of the year.”
.png)
.jpg){kind=logo}
.jpg)
.png)
Join the conversation
Jump to latest comment and add your reply
Dampening house price growth might be welcome as otherwise the industry will start to see decreasing volumes of house sales. In some areas the gap between and 2 bedroom flat to a house or a 3 bedroom house to a four bedroom house over the last 10 or 15 years is more than the person paid for the property in the first place and wages have moved little over the period. For many would be buyers the market has been broken for many years and they are locked out probably forever unless they have a windfall. Buy to let whilst an essential part of the market started to boom 20 years ago and took stock out of the sales market in many cases permanently whereas in the old world it would have turned over every few years. Taking this stock out of circulation permanently self perpetuates the upward sriral .Government interference seems to cause more problems that it solves and we cant keep kicking the tin can down the road. That tin can is now pretty huge now which is good for the banks as security and there lies another story... We need volumes not house price growth. On that part Bruce is right.
Actually the PRS acts as a pressure relief valve that prevents a runaway market as in the mid late 80s
Excessive mortgage lending, galloping inflation, rising interest rates and massive fuel hikes... sound familiar? This is how the 2007 global financial crash started.
You have missed out all of the factors that are different now compared with 2007. The financial system is completely different. Banks are better capitalised, lending hasn’t been irresponsible, businesses have stronger balance sheets and consumers haven’t been spending for the last two years. Today is not even close to being similar to 2007.
@Eve K Kay
Give it a few years. They are already getting geared up to lend, there are new products coming out every day. As for thinking that consumers haven't been spending for the last 2 years, where exactly have you been hiding?? Why do you think corporate profits are up and equities are at an all time high?
It's not 2007 yet, but it's certainly on it's way.
So many landlords are selling up because tenants have more rights than they do, this is something that has to change for sure. Rents are increasing because there are not enough houses to rent. The government has it wrong on so many levels.
The current market remains in flux as a direct result of the Government's last major intervention with the SDT holiday. What we need is a stable market which will only happen when the market is allowed to re-set itself and will then respond to other 'normal' market forces. Further Government intervention will exacerbate the issues and push the problems further down the line.
I'll add that Boomin (& Bruce) have possibly realised that with the ridiculous demand and supply shortage agents don't need yet another 'Rightmove challenger', with another monthly bill to pay. Their product is superfluous...
Please login to comment